Searching for answers

Marketers spent £1.3bn on online advertising in the UK during 2005, and paid-for search accounted for 56.2% of that spend, for a total of £768.3m, according to the latest figures from the Internet Advertising Bureau (IAB) and PriceWaterhouseCo

Search marketing is a vital part of any online ad campaign and, as search engines develop ratings based on quality and relevance, marketers must develop strategies to reflect that. By Martin Croft

Marketers spent &£1.3bn on online advertising in the UK during 2005, and paid-for search accounted for 56.2% of that spend, for a total of &£768.3m, according to the latest figures from the Internet Advertising Bureau (IAB) and PriceWaterhouseCoopers (PwC). By comparison, online display advertising took &£335.9m, or 24.6% of online advertising spend over the 12 months.

Of course, marketers need to be aware that paid-for search is only part of the picture: the IAB/PwC figures do not cover the millions spent by marketers on search engine optimisation, the process of designing and redesigning websites so they deliver the best possible user experience.

Marketers must also realise that the two parts of search marketing cannot be treated separately – they are inextricably linked, and are becoming ever more so.

Relevancy gets results

Google has always had a “relevancy” element included in the equation it uses to rank pages when people search online; and this has evolved over the past few years to become even more important. What that can mean for marketers is that they will end up getting a better return on their investment if they make sure the results they deliver to consumers searching the Web are more relevant.

As Google vertical markets director for Europe Jeff Levick says: “We reward advertisers who complete the relevancy cycle, not just in the Google environment, but by making relevancy part of the quality scoring system we use.” The better quality search results an advertiser delivers, the higher future results from that advertiser are likely to be ranked.

Google is not the only major search engine to use quality and relevance as part of its underlying indexing systems, although industry experts agree that right at this moment, Google has an edge over its major rivals. But that will soon change, it says, with the launch this month of Microsoft’s own search engine, and the launch of an upgraded Yahoo! Search later this year in the US and early 2007 for the UK. Both will include relevance as a key part of the underlying system for ranking pay per click (PPC) search results.

Paying for position

Richard Firminger, regional sales director Northern Europe for Yahoo! Search Marketing admits: “The ‘bidding equals position’ model is the one currently used on Yahoo! Some advertisers like that – they can see exactly what they need to spend to affect their position on page. But the model is evolving, and search engines are moving towards using quality, click through and relevance as key parts of their ranking systems.”

Right now, though, one of the reasons Google has an edge is that it has just – at the end of July – launched its Landing Page Algorithm, which will have a major impact on PPC advertising, digital media experts say. Google is downplaying suggestions that advertisers who deliver results that are deemed of lower quality will be charged more for key words in the future: but that is exactly what the new algorithm means, according to many digital media buyers.

Zoe Scaman, search manager at digital media agency BLM Quantum, says/ “These developments will push up costs for non-relevant ads because those advertisers will have to pay higher minimum bid prices in future.”

Previously, Scaman says, Google scored relevancy by measuring click-through rates – but that measurement did not take into account how long people stayed on a site they clicked through to, whether they went on to complete a transaction of some sort and so on. marked landing pages

Now, Google is effectively marking landing pages for relevance and quality of user experience. So if a search result takes a user through to a site with too many flash ads, or if a landing page repeats copy and content used on another search result (which often happens with affiliate marketing sites) or if a landing page then forces a user to conduct another search (as happens with arbitrage sites), then in future the advertisers will see their minimum bid raised.

Alicia Levy, managing director for pay per click at search marketing agency Greenlight, says: “Google rewards you if you follow their rules.” But she highlights another problem with the move by the major search engines towards using quality of user experience as an integral part of the result ranking system – advertisers who rely purely on using automated bid management systems may end up throwing far more money at PPC search than their rivals. Bid management systems are software packages that allow marketers to monitor and control their PPC bidding from their PCs. Obviously, â¢they can offer enormous advantages to busy marketers, because they automate many of the more analytical functions of PPC media buying.

But, Levy argues, “bid management systems will no longer work optimally on Google, and they won’t work well on Microsoft Live or on the new Yahoo! Search system.”

Stephanie Carr is deputy managing director of search marketing company The Search Works (TSW). TSW offers clients its own bid management system, Bid Buddy. Carr argues that the belief a move towards quality and relevancy as defining characteristics will mean that bid management is dead is rather “melodramatic”. But she admits that “bid management is having to evolve”.

Key word management

As she says, a client that has to manage a PPC campaign involving tens or even thousands of key words simply cannot make changes manually – “you need a bid management system – how else can you change your maximum bid from &£1 to 85p in a minute?”

But Carr accepts the need to change bid management systems so that they can include other measurements, such as click throughs, which better reflect the user experience.

Carr believes the changes are good for advertisers and users alike. For users, it should mean a better search experience: for advertisers, it should mean better leads, easier conversions and a higher return on investment (ROI).

The changes will have an enormous impact on affiliate networks and shopping comparison sites, too. By their nature, both tend to be ad heavy, carry copy that can be found on other websites and often send users on to other sites, these are things that quality-based ranking systems may end up interpreting as indicative of low levels of customer satisfaction. Yet many marketers use affiliates as a way to boost their chances when competing for consumers’ attention on-line. Big banks and building societies, for example, can only bid once on each key word: but if they recruit a number of affiliate sites, then each of those affiliate sites can then bid on the same keywords, which means that a particular brand name can appear a number of times in the all-important top ten PPC search results.

Some marketers, however, would be happy to see a system which penalises affiliates. Many experts have argued that marketers are effectively paying more than they should do because they end up bidding against their own affiliates for key words and even sometimes on their own brand names.

Similarly, shopping comparison sites are valid marketing tools and provide consumers with a useful service, allowing them to see on one site what different retailers are charging for a particular item and what the extras might be. Nor is it just shopping comparison sites that might be affected by the content quality issue: online shopping sites run by major retailers may fall foul of exactly the same issue, as it is likely that if a consumer is searching for a particular item, the copy the e-tail sites run will be pretty much the same.

As Scaman observes: “If you’re looking for a Sony TV, then Dixons, Currys and Comet will all be selling the same item. Google will charge them different amounts for key words depending on which website it thinks is more relevant. That’s beginning to smack of Big Brother – Google getting directly involved in what people can say on their sites.”

Improve traffic quality

However, she adds: “On the positive side, it should drive up ROI, improve the quality of traffic and deliver increased sales.”

Arbitrage sites are also likely to be hit hard by the move to a system where quality of search results impacts future PPC costs, but few digital experts seem unhappy with that. Arbitrage sites quite literally make their money by constantly monitoring the bid costs for key words on the different search engines. If they see a significant difference between two engines, they will buy the key word on the cheapest site, then force users ⢠to effectively search again using the more expensive engine, and make a margin on the difference.

Arbitrage sites have been the target of much of the consumer criticism levelled at the whole search experience, say experts.

Integrate for impact

Jerome Underhill of Advertising.com argues that the impact of PPC advertising can be increased by integrating it with all of a brand’s other online activity – another way to build relevance.

“Compelling creative treatment, deep linked URLs and enticing landing pages will continue to play their part. However, aligning paid-for-search spend with the rest of your online advertising buy also looks set to become increasingly important,” he says.

In a sense, it is not just a matter of how relevant your site is to the consumer searching the internet: it is also how relevant that consumer is to you: “Paid-for clicks will naturally not all convert as you would wish upon initially visiting a site. However, with search engines often being the starting point in the consumer’s online research process, most of these visitors remain ‘in market’ as they move around the Web.” So advertisers need to be looking not just at making their landing pages enticing: they need to be tailoring their advertising in the same way.

Anthony Lukom, head of search commercialisation strategy for portal AOL Europe welcomes any moves that provide users with a better search experience. He points out: “Every time you ask users what they want from the search experience, they will say they want ease of use and they want relevant search results. People don’t really want to search – they want to find.”

A better experience

And sensible marketers should be happy with moves from the search engines to improve user experience, he adds, because it will force them to ensure their websites are as relevant as possible – and “the more relevant the link is, the better the click-through rates and the better the return on marketing investment.” He says that AOL has already noticed that far more users are staying on the first page they click through to when they run a search, rather than moving on to other results or even running the search again. And, as Lukom says: “That suggests people are increasingly finding what they are looking for.”

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